The CBO Report That Didn’t Roar

By Drew Altman - A Congressional Budget Office (CBO) report in September slipped through the health universe garnering some attention from health policy insiders, but not enough, going largely unnoticed by the larger health community despite its potentially broad implications for efforts to promote value through popular payment changes. Read Full Article…

VBA Article Summary

1. CMMI Demonstrations and Financial Outcomes: The Congressional Budget Office (CBO) reported that most payment and delivery demonstrations by the Centers for Medicare and Medicaid Innovation (CMMI) between 2011 and 2020 did not yield the intended cost savings. Instead, these initiatives, part of the post-Affordable Care Act (ACA) era, resulted in a net loss of $5.4 billion for the government, including associated administrative costs. The CBO also projects that CMMI will continue to be a net cost to Medicare through 2030.

2. Mixed Results and Evolving Strategies at CMS: Despite the general findings, some success was noted in the CBO report. Six out of 49 CMMI payment demonstrations showed modest savings, with four being certified for expansion by the CMS Actuary. These include models focused on accountable care and diabetes prevention. In response to these mixed outcomes, CMS has evolved its strategy, now incorporating a focus on equity in its initiatives, such as the AHEAD (All Payer Health Equity Approaches and Development) program, which emphasizes hospital cost management, primary care, and equity initiatives.

3. The Future of Medicare and CMS Innovations: Despite the setbacks in some demonstration projects, CMS maintains its goal of enrolling every Medicare beneficiary in an accountable care arrangement within seven years. The agency recognizes the need for continued experimentation and innovation in its major programs (Medicare, Medicaid, ACA). There is an acknowledgment that not every initiative needs to save money; some may be worth investing in if they improve access or health outcomes. This perspective underlines the ongoing debate on the best strategies for cost containment and quality improvement in healthcare.

DOL Proposes to Rescind 2018 Association Health Plan Rule

By Paul Mulholland - The Department of Labor on Tuesday proposed to formally rescind a rule finalized in 2018 that was intended to make it easier to form and join association health plans. The 2018 rule was vacated by the U.S. District Court for the District of Columbia in 2019. Read Full Article…

VBA Article Summary

1. 2018 Rule and ACA Evasion: The Department of Labor's 2018 rule facilitated small and individual plans to be recognized as large group plans, allowing them to circumvent some requirements of the Affordable Care Act (ACA). Roberta Casper Watson, a partner with the Wagner Law Group, emphasized that this rule was primarily used to bypass ACA regulations, a point echoed by the district court's description of the rule as an "end-run around the ACA."

2. ERISA and Employer Associations: The Employee Retirement Income Security Act (ERISA) defines employer associations capable of creating health plans. The 2018 rule relaxed several stringent criteria for qualifying as an employer association. These criteria included having a legitimate business purpose beyond just creating a health plan, a commonality of interest among members (such as belonging to the same industry), and substantial control over the plan by member employers. The rule also redefined commonality to include geographic proximity and introduced the notion of a working owner, enabling small business owners without employees to participate.

3. Federal Court Ruling and DOL Response: In 2019, a federal court ruled that the 2018 rule violated ERISA by allowing associations without a genuine employer-employee relationship to act as if they did. Assistant Secretary of Labor Lisa Gomez, in a PLANSPONSOR interview, described the rule's intention of guiding how employers or associations could set up association health plans. Following the court ruling, the Department of Labor proposed rescinding this rule and is seeking public feedback until February 20, 2024, to inform future policy directions.

Blue Cross loses bid to block damages in long-running antitrust case

By Mike Scarcella - A U.S. judge has rejected Blue Cross Blue Shield Association's bid to bar monetary damages claims from a long-running antitrust case allowing Alabama healthcare providers to seek billions of dollars from the insurance giant and its members for allegedly scheming to underpay them for years. Read Full Article…

VBA Article Summary

1. Legal Advancement of Provider Claims: U.S. District Judge R. David Proctor's ruling in Birmingham allows health professionals, hospitals, and other providers to move forward with their claims against the Blue Cross Blue Shield Association. These claims, separate from a $2.7 billion settlement reached in 2020 for insurance subscribers, allege significant financial damages, with estimates exceeding $5 billion for Alabama hospitals alone.

2. Implications of the Damages Ruling: The recent decision on damages is pivotal in the ongoing legal battle, addressing one of several critical legal disputes in the case. The ruling, favoring the providers, negates the Blue Cross Blue Shield Association's hope of avoiding a trial, as stated by a lead lawyer for the providers, Joe Whatley Jr. This development indicates a potential trial, although no date has been set yet.

3. Nature of the Allegations and Defense: The providers accuse Blue Cross Blue Shield of price-fixing and anti-competitive practices, alleging the organization divided the country among its member groups without allowing them to compete. Meanwhile, the defense argues that the providers' claims of damages are speculative and were made too late. The plaintiffs' attorneys have indicated a low likelihood of settlement, setting the stage for further legal proceedings.

One VC Firm’s 5 Healthcare Predictions for 2024

By Marissa Plescia - The healthcare landscape in 2024 presents some interesting challenges and opportunities, whether it’s in regards to generative AI or value-based care, according to executives at LRVHealth, a healthcare venture capital firm. Read Full Article…

VBA Article Summary

1. Generative AI in Healthcare: Keith Figlioli of LRVHealth predicts that 2024 will see generative AI moving beyond pilot programs into actual clinical practice in healthcare. However, he also foresees challenges, including at least one significant event related to bias or misuse in clinical delivery. This incident is expected to prompt the healthcare industry to reevaluate the use of generative AI, particularly in handling personal health information.

2. Growth of Medicare Advantage: Despite rising concerns, Medicare Advantage enrollment is anticipated to increase. Figlioli suggests that more health systems will develop senior-focused clinical delivery networks for Medicare Advantage patients. This trend is expected to intensify competition with existing organizations like Oak Street Health and ChenMed.

3. Transformation in Value-Based Care: Ellen Herlacher of LRVHealth forecasts a shift in value-based care companies, which will focus more on medical cost management rather than risk-adjusted expansion. She anticipates increased investment in referral management, site of care optimization, and the development of healthcare workforces dedicated to access, care navigation, and healthcare literacy.

Employer Health Plans Fear State PBM Crackdown Preemption Threat

By Sara Hansard - Employers looking ahead to a continued push by state and local governments to more closely regulate pharmacy benefit managers in 2024 are set to back stricter federal law preemption of these measures. Read Full Article…

VBA Article Summary

1. Criticism and Need for Federal PBM Reforms: Pharmacy Benefit Managers (PBMs) are criticized for their lack of transparency and for inflating costs to health plans. Employer groups are advocating for reforms at the federal level, similar to actions taken by some states, to ensure uniform standards across the nation. This is seen as necessary to avoid a patchwork of state laws and to maintain a consistent regulatory system under the Employee Retirement Income Security Act (ERISA), which is approaching its 50th anniversary in 2024.

2. Concerns Over Eroding ERISA Preemption Protections: Some employer groups are wary of efforts that might undermine ERISA preemption protections as Congress considers PBM-related bills. They argue that removing PBMs from ERISA preemption could have catastrophic effects on self-insured health plans and potentially impact ERISA-governed retirement plans as well. Recent state laws and court decisions, like Rutledge v. Pharmaceutical Care Management Association, have raised concerns among these groups about potential infringement on ERISA protections.

3. State-Level PBM Legislation and its Implications: Various states have enacted laws to regulate PBMs, with over 250 bills introduced in 48 states in the past year. Notable examples include Florida’s Prescription Drug Reform Act and Oklahoma’s Patient’s Right to Pharmacy Choice Act. These laws impose new mandates and conditions on PBMs, but have faced legal challenges regarding their compliance with ERISA. The resulting legal battles and the potential appeal to the U.S. Supreme Court indicate a significant interest in the outcome and its implications for state and federal regulation of PBMs.

Benefits: Why You Might Soon Get Texts About Your Health Insurance

By Jamie Feldman - Issues in provider communication methods may be leading to patients missing medical bills, a new survey showed. About 45% of patients have missed or forgotten to pay medical bills because of challenges they experienced in communicating with their provider, the survey from Artera found. Another 43% of patients said that these communication issues negatively affected their health. Read Full Article…

VBA Article Summary

1. Introduction of  Notify.gov, managed by the General Services Administration (GSA), is a digital notification service that provides text message updates about various government services such as application deadlines, interview reminders, and fraud reduction. This service aims to streamline processes for state and local agencies administering federal programs, enhancing communication and reducing administrative burdens. It's initially launched as a beta test in specific locations including Norfolk, Virginia, Montgomery County, Maryland, and the states of Wisconsin and Washington.

2. Operational Framework and Objectives: The program operates under the GSA’s Technology Transformation Services' Public Benefits Studio, led by Amy Ashida. The studio comprises technologists with expertise in government programs like Medicaid and the Supplemental Nutrition Assistance Program (SNAP). The service is designed to simplify public benefit programs and improve accessibility to benefits and resources for participants.

3. Advantages and Challenges of the Service: The move to text messaging corresponds with the GSA’s observation of the limitations of traditional postal mail, which can be unreliable and slow. Text messaging has proven effective in similar programs in Canada and the U.K., showing significant improvements in program engagement and cross-enrollment. Alongside the benefits, the introduction of Notify.gov also brings attention to the risk of text messaging scams, prompting warnings from various government agencies like the Federal Communications Commission (FCC) about how to avoid such scams and safeguard personal information.

Dangerous doctors? Malpractice-prone docs, hired by insurers, are 'cranking out denials'

By Patrick Rucker, David Armstrong and Doris Burke - When Shawn Murphy’s wife died in 2009 after a botched gallbladder surgery, he presumed the doctor who performed the operation would be forced out of medicine for good. Read Full Article…

VBA Article Summary

1. Malpractice History and Transition to Insurance Industry: Dr. Pachavit Kasemsap, a former Air Force surgeon, faced serious malpractice allegations, including a case where he mistakenly cut Loretta Murphy’s aorta during surgery, leading to her death. Despite this, Kasemsap transitioned to the health insurance industry after settling five malpractice cases for a total of $3 million. He became a medical director at an insurance company, where he gained significant influence over patient care decisions without directly seeing patients.

2. Role of Medical Directors in Health Insurance: The article highlights the crucial role of medical directors like Kasemsap in health insurance companies. These directors, often without meeting patients, can overrule the decisions of treating physicians and deny coverage for recommended treatments. This can have significant implications for patients, including the denial of necessary care and financial strain. The qualifications and backgrounds of these medical directors often remain obscured from patients and policyholders.

3. Concerns Over Qualifications and Backgrounds: The investigation by ProPublica and The Capitol Forum revealed that several medical directors in insurance companies have histories of malpractice payments or disciplinary actions by medical boards. This raises concerns about the qualifications and appropriateness of these individuals making critical healthcare decisions. The article emphasizes the lack of transparency in the hiring and oversight of these medical directors, despite their significant impact on patient care and health outcomes.

Predictions for Healthcare Price Transparency in 2024

By Mark Stamper - …..the healthcare landscape continues to evolve rapidly, shaped by regulatory changes, technological advancements, and shifting consumer expectations. For those entrenched in the healthcare ecosystem, the pursuit of transparency remains a focal point, evolving from a simple aspiration to a fundamental necessity. Read Full Article…

VBA Article Summary

1. Enforcement of the Transparency in Coverage Rule: In 2024, the healthcare industry expects stricter enforcement of the Transparency in Coverage Rule (TiC Rule), which mandates health plan sponsors to disclose their negotiated rates for services and payments to out-of-network providers. Unlike the leniency shown in its first year (2023), the article predicts that fines will be imposed starting from the end of Q3 2024 for non-compliance, especially as the scope of the mandate expands to include nearly all services.

2. Increased Pressure on Smaller Healthcare Plans: Smaller healthcare plans, with limited IT budgets, are likely to face greater challenges in complying with the transparency requirements. These organizations might be the initial targets for non-compliance penalties, with each fine potentially causing significant financial strain. The article suggests that these smaller plans should prioritize the deployment of compliant price transparency tools.

3. Evolving Legislation and Empowered Consumers: The article predicts future adjustments to the Transparency in Coverage Rule due to varying interpretations and compliance audits. This includes potential updates to enforcement measures and information disclosure guidelines. Additionally, there's an expectation of a shift towards a more consumer-centric healthcare approach, driven by regulations like the No Surprises Act and the TiC Rule. This shift is anticipated to lead to the development and adoption of user-friendly tools, promoting transparency and informed decision-making in healthcare.

Healthcare Advocacy: For What and for Whom?

By William H Bestermann Jr. MD - There are many organizations in the United States that hold themselves out as advocacy organizations for better care for patients, but is that what they are really about? Here is a quote from KFF Health News. Read Full Article…

VBA Article Summary

1. Pervasive Pharmaceutical Industry Funding: The article highlights the widespread financial influence of the pharmaceutical industry in various healthcare-related organizations. Public Citizen, a consumer advocacy nonprofit, reported that between 2010 and 2022, the drug industry's main lobbying group and its member companies provided at least $6 billion in grants to over 20,000 organizations. This funding raises concerns about conflicts of interest, particularly in patient advocacy groups, which might be less inclined to oppose drug industry policies even if such opposition could benefit patients.

2. Case Study of the American Heart Association (AHA): The American Heart Association received significant funding from the pharmaceutical industry, amounting to $64.1 million over 12 years. This financial support extends to various forms of endorsements and sponsorships, raising questions about the impartiality of their health recommendations and advocacy. The article also criticizes the AHA's product endorsement practices, suggesting they may not always align with genuine health benefits, as illustrated by the endorsement of high glycemic index foods like potatoes.

3. Broader Implications for Patient Advocacy and Healthcare: The article argues that the financial ties between healthcare advocacy organizations and the pharmaceutical industry create a conflict of interest, compromising the primary duty of these organizations to advocate for patients' needs. This situation is exemplified by the author's personal experience with a healthcare advocacy organization, where financial support from the pharmaceutical industry influenced organizational decisions. The article concludes that real advocacy for healthcare improvements needs to be independent and free from such conflicts of interest, advocating for fundamental changes in how healthcare advocacy organizations operate.

Lilly launches website, home delivery option for weight-loss drug

By Reuters - Eli Lilly and Co (LLY.N) on Thursday launched a website to enable people to directly order from the drugmaker including its weight-loss medicine Zepbound as well as connect people with obesity and other conditions with telehealth companies. Read Full Article…

VBA Article Summary

1. Introduction of LillyDirect Service: LillyDirect has been launched in response to the high demand for effective weight-loss drugs, such as Novo Nordisk's Wegovy. The obesity drug market is projected to expand to approximately $100 billion by 2030, drawing interest from various weight management service providers like WW International and Ro, who have also introduced telehealth services for these drugs.

2. Market Impact and Service Features: The announcement of LillyDirect negatively impacted WW International's shares, which dropped over 10%. LillyDirect aims to broaden its services beyond obesity, offering direct-to-consumer options for diabetes and migraine treatments as well. This includes home delivery of drugs like Emgality and insulin. The service connects patients with independent telehealth providers and offers pharmacy services through third-party providers.

3. Industry Perspective and Lilly's Stance: Analysts, including BMO Capital Markets' Evan Siegerman, view Lilly's direct-to-consumer approach as innovative, particularly for obesity medications. Lilly's shares have seen significant growth, partly due to optimism surrounding their new drug, Zepbound. However, Lilly has explicitly stated its opposition to using its obesity and diabetes drugs, Mounjaro and Zepbound, for cosmetic weight loss purposes.